Production Performance & Costs

Transcription

1 Irish Farmers Journal Pig Supplement, November 2011 The Irish Pig Sector Ciarán Carroll, Teagasc, Moorepark Pig production in Ireland ranks third in importance behind beef and milk production with a farm-gate value of 331 million, accounting for 6% of Gross Agricultural Output. Employment in the pig sector accounts for at least 1,300 labour units on farms. The total number employed in associated sectors such as pig meat processing, feed manufacture, haulage and services is estimated at 7,000. The Teagasc Pig Development Department biennial survey of commercial pig production units in January 2011 reported that the number of sows in the 290 commercial sow herds was 150,700, giving an average sow herd size of 520 head. Currently, over 70% of commercial sows are in herds of 500 sows and over. Production Performance & Costs Production performance has improved in recent years. The Key Performance Indicators from the Teagasc PigSys recorded herds (2010) are shown in Table 1. Table 1: Key Performance Indicators in PigSys Recorded Herds 2010 Performance Indicator No. Pigs Produced per Sow per Year 23.9 Average Slaughter Weight kg Dead 78.9 Average Daily gain Weaning to Sale g 657 Feed Conversion Weaning to Sale 2.48 Production costs in recorded herds averaged cent per kg dead weight in 2010 (comprised of 90.4 c/kg feed plus 42.5c/kg non-feed costs. This conceals the large increase in feed prices from the 2010 harvest. Current feed costs are 112c/kg. In many cases non-feed costs are now 50 c/kg. The average price for pigs sold in 2010 was 140.3c per kg dead weight.

2 Food Harvest 2020 The targets for the pig sector can be summarised as follows: 1. Address the profitability gap: Reduce costs of production and maximise pig price. 2. Increase the average number of pigs produced per sow per year from 21.0 (average ) to Increase the national sow herd by 50,000 sows to 200,000 sows. Food Harvest 2020 identifies the need to address the profitability gap in the sector as a prelude to further expansion in the national sow herd. Specifically, a reduction in feed costs per kg of pig meat has to be achieved thereby reducing the gap between Ireland and many of the main pig meat producing countries in the European Union. The profitability and credit crisis in pig production since the 2010 harvest has left most pig producers under serious financial pressure and will have significantly curtailed many, if not all, immediate plans for development and expansion. Challenges 1. Feed Costs Feed typically represents 70% of the cost of production although this can vary significantly between pig units. Cost of production is a key factor in determining the cost competitiveness of Irish pig meat both in competing with imports on the home market and with other pig meat exporting countries on export markets. Feed cost per kg dead weight in Ireland compares unfavourably with many of the main pig meat producing countries within the EU, about 12c/kg dead weight higher than the average of Denmark, the Netherlands, France and Germany in 2010 (Source: InterPig 2010). The higher feed cost in Ireland is due to a combination of the following: (a) Lower slaughter weight: pig slaughter weights in Ireland are lower than in other countries and especially in countries such as the Netherlands, France and Germany. This means reduced usage of the less expensive finisher feed in Ireland as a proportion of total feed per pig. There is also significantly lower usage of expensive pig rearer diets in other countries.

3 (b) Higher cost of diets: InterPig results (2010) show the average composite feed price in Ireland to be 31 per tonne more expensive in Ireland than the average of Denmark, Netherlands, France and Germany. (c) Feed credit terms: One significant difference between feed purchase in Ireland and in continental countries is the use of feed credit. Producers in these European countries normally pay for feed within 7 days of delivery and typically by direct debit. A Teagasc survey of 63 Irish herds with 25,000 sows (average herd size of 396 sows) in 2009 found that the average length of credit was 16 weeks. This incurs an effective interest rate of 1.5% per month which is factored into the feed price. At current feed prices this could cost an additional 16 per tonne. (d) Feed efficiency: While feed efficiency in Irish herds compares favourably with that in other countries, there are some indications that the nutrient specifications of the diets used in Ireland may be higher than in other countries. (e) Cost of ingredients: Virtually all of the protein sources and a significant proportion of the cereals used to manufacture pig feed have to be imported. In addition to the cost of these ingredients and the cost of shipping there are significant handling/brokerage costs attached to each. (f) Feed price volatility: While pig feed prices have traditionally fluctuated, recently this became a major challenge because of the high feed prices after the 2007 and 2010 cereal harvests. 2. Sow Productivity The average number of pigs produced per sow per year in Ireland in Teagasc PigSys recorded herds (23.1) is higher than the average for all herds (21.0), a difference of 2.1 pigs per sow per year. The most recent data from InterPig show sow productivity in recorded herds in Ireland to lag behind those of a number of EU member states (Table 2).

4 Table 2: No pigs produced per sow per year in recorded herds in selected EU member states 2009 Country No. pigs produced per sow per year Netherlands 26.0 Denmark 25.6 France 24.7 Ireland Pig Welfare a. Loose Dry Sow Housing: From January 1 st 2013 pig producers will not be permitted to confine pregnant sows in individual pens or stalls during the period from 4 weeks after service to one week before the expected date of farrowing. During this time pregnant sows must be kept in groups. This will come at a substantial cost to pig producers. Based on an average cost for new and renovated accommodation an investment of 30 million is required. The grant aid scheme (TAMS) which was available for loose dry sow housing is currently suspended and compliance with the regulation for many producers will depend on it s re-introduction. b. Environmental enrichment: the legislation states that a pig shall have permanent access to a sufficient quantity of suitable material such as straw, wood, peat, mushroom compost to enable proper investigation and manipulation activities, that does not compromise the health of the pig. The identification of methods and materials to comply with these provisions is a significant challenge for the sector. c. Other provisions: There are a substantial number of other provisions in the current regulations that have financial and production implications, e.g. the dimensions of the slats in use on many units may not meet the legislative requirements in terms of slot width. d. Future legislation: Welfare legislation is continuously under review. Additional requirements are possible including: restrictions on the use of farrowing crates/

5 provision of nesting materials; ban on castration (with further potential limitations on tail docking and teeth clipping); loose housing of sows after weaning; restrictions on the use of slatted flooring; adjustment to space allowances. 4. Environmental Regulations Current Nitrates regulations (S.I. 610 of 2010) permit the application of pig manure to land in excess of the prescribed quantity (maximum fertilisation rate) of phosphorus. This transition arrangement will be phased out over the coming years until completely removed in This gradual reduction and phasing out will increase the area of land required to utilise pig manure as a fertiliser. This is likely to result in increased transport distances for manure and increased costs of production. There is a significant challenge to reduce the volume of pig manure produced on units (primarily by improved water management) thereby reducing transport costs.